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Monday, 23 November 15
DRY BULK MARKET: NET FLEET GROWTH IS SLOWING DOWN, AS SHIP OWNERS ARE LOOKING FOR WAYS TO ALLEVIATING MARKET MELTDOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 The dry bulk market has been in “meltdown” mode for a few weeks now, unable to find support and avoid the fall in historical lows. As such, it’s worth taking a closer look at the factors which can support rates in the future. In a recent analysis, dry bulk ship owner Precious Shipping, said that “the dry bulk sector is chronically over-supplied and will remain so over next few years. However let’s not forget that global seaborne trade is still growing steadily from a historical perspective. But the market needs time to realign supply with demand. In the meantime we need to manage our expectations and keep our faith in the industry. Shipping is prone to surprises and things can change pretty quickly”.
For instance, in terms of future supply developments, the world bulker fleet growth has slowed down considerably over the course of the past year. According to Precious Shipping’s analysis, “we started 2015 with 770.34 MDWT and have increased to 781.74 MDWT by the end of Q3 for a 1.48% net fleet growth. A further 5.76% (44.40 MDWT) is scheduled for delivery in the balance of 2015 and another 8.73% (67.23 MDWT) scheduled for delivery in 2016. If we were to apply a slippage factor of 40% to these scheduled deliveries and further assume that scrapping reaches 36 MDWT per annum we would be left with a net fleet growth of 3.22% (795.12 MDWT) in 2015 and another 1.89% (810.12 MDWT) in 2016. Net fleet growth is increasing, but marginally, compared to the recent past”, said Precious.
The ship owner added though that “the situation in China is partially obscuring a real change that has taken place in the capesize market (which has been driven by the capesize fleet shrinking while iron ore production from the major miners is increasing). Many had expected Q4 strength in the capesize market, but the strength has begun in July. This is real change, and one that is become somewhat obscured due to panic over Chinese equity prices”. Precious then described a scenario, which, so far has failed to materialize. It has said that “going forward, we remain bullish for capesize rates for Q3 2015 and Q4 2015. Iron ore exports from major miners will rise during the upcoming months. If China is still buying the iron ore (which is very likely), capesize availability is likely to see upcoming periods in H2 where vessel availability is much tighter and this is what drives freight rates”.
Demand-wise, Precious wondered if “Peak Coal” is a reality in China? According to the owner, “China is the world’s largest consumer of coal, accounting for nearly half of global demand. The leading source of domestic demand is naturally power generation, which accounts for about two-thirds of coal consumption in the country. With air pollution and environmental degradation becoming increasingly acute social emergencies, significant effort and investment is being made by the government to try to reduce the country’s reliance on fossil fuels. Domestic coal mining has itself been at the center of a storm. This is a very fragmented industry, with an appalling environmental and safety record, and recently also in terrible financial shape as most mines are losing money. There seems to be very little incentive to support the industry, except in an attempt to save jobs in areas of the country where few alternatives exist. China’s domestic coal output has been essentially flat in 2013, and even declined marginally in 2014 and in the first half of this year. Therefore, there could actually still be hope for imports to rebound. Never say, never”.
Analyzing China’s economic transition, Precious noted that “averaging almost 10% per year in the thirty years from 1978 to 2008 the pace of China’s growth is in the process of slowing to probably half that, albeit on a substantially larger base. China’s gradual transition from investment-led to consumer-based growth is necessitated by the fact that it no longer gets a reasonable return from every dollar invested at home. It has chronic industrial and manufacturing overcapacity that has been built up to support jobs, jobs that require ever higher wages. Now that excess production, in the context of weak domestic and overseas demand, is causing falling prices and negative profit margins. The solution is a grand plan to rebuild the old Silk Road by taking advantage of absurdly low borrowing costs to invest in other people’s infrastructure. The project was first mentioned in 2013 but gained momentum in March as Chinese growth was noticeably decelerating. China’s surplus capital, labour and productive capacity can be mobilised to get a better investment return across a vast footprint that includes southeast Asia, the Subcontinent, the Middle East, central Asia and eastern Europe and well over 3 billion people. Chinese Premier Li Keqiang speaking at the World Economic Forum in Dalian said China is on track to meet all its economic targets for this year despite fears of a deepening slowdown in the world’s second largest economy. China would take more steps to boost domestic demand and implement more policies to lift imports, he said”.
In the meantime, “2015 is turning out to be another challenging year for the Chinese steel industry. However, we believe this to be cyclical rather than structural, and a recovery is expected next year, in terms of both steel demand and ore imports. We are still far from ‘peak steel’. China’s steel use per capita, at 515 kg, is still modest for a country at this stage of development. The USA, Japan and Germany peaked at well over 700 kg in the 1970s and 1980s. China is flooding the world with cheap steel at an unprecedented rate and keeping some shipping lanes busy that would otherwise be quiet. For the first seven months of the year, exports were up 27% to 62.13 MMT and could reach 111 MMT by the end of the year, according to forecasts from commodities researchers at Macquarie. Grain imports into China continue to forge ahead and at the 8 month point are up 10.8 MMT (19%) to 66.3 MMT y-o-y. Soyabean imports stand at 52.4 MMT up nearly 5 MMT, whilst barley imports have nearly trebled to 7.4 MMT; corn imports also more than doubled to 4.4 MMT and wheat imports are slightly lower at 2 MMT. This significant increase in grain imports contrasts to that of coal where imports into China have declined by 60 MMT (-32%) y-o-y whilst iron ore imports have also registered a modest decrease of 1.4 MMT (-0.2%) y-o-y”.
Additionally, “despite the macroeconomic numbers, Chinese Iron Ore imports reached 699.43 MMT by end September for an annualized total import of 932.57 MMT or almost identical to the 933.11 MMT in 2014. Chinese Steel production reached 606.73 MMT by end September for an annualized total of 808.97 MMT or a marginal decrease of 0.53% compared to the 813.30 MMT in 2014. Chinese Steel exports reached 73 MMT by end September for an annualized total of 97.33 MMT or an increase of 3.77% compared to the 93.79 MMT in 2014. Coal imports into China reached 156.47 MMT by end September for an annualized total of 208.63 MMT or a decrease of 28.46% over the 291.63 MMT imported in 2014. In a country that currently produces and consumes just under 4.0 BMT of Coal per annum even a small change in their Coal requirements via imports could have a dramatic impact on the dry bulk freight markets”, Precious Shipping concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 16 November 15
KOMIPO INVITES BIDS FOR 1.295 MILLION TONS OF BITUMINOUS COAL FOR Q1 - Q2'16
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 1,295,000 Metric Tons (MT) of minimum 4,600 kc ...
Monday, 16 November 15
SOUTH CHINA COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.05 (12.59%) per ton month over month.
A commodity swa ...
Monday, 16 November 15
CLARKSEA INDEX COMPETITION: IS IT ALL IN THE TIMING? - CLARKSONS
Readers of the Shipping Intelligence Weekly are invited each year to predict the value of the ClarkSea Index one year ahead in the first week of No ...
Monday, 16 November 15
DRY BULK MARKET: Q1' 2016 SHAPING UP TO BE A ' DISASTROUS' ONE OF PROJECTED LOWER IRON ORE IMPORTS FROM CHINA
Over the course of the past year or so, it’s been the drop of coal imports from China, which has had a detrimental effect on the course of dr ...
Friday, 13 November 15
WEAK CHINA POWER DEMAND DAMPENS COAL CONSUMPTION - FITCH
The weak growth in China's electricity consumption in 2015, together with increasing non-thermal power generation capacity are exerting more pr ...
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Showing 2711 to 2715 news of total 6871 |
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- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Australian Coal Association
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
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